You’ve Nailed Your Niche… Now Build Your Boutique: Generate Revenue with this Emerging Best Practice

by & filed under All Articles, Growing Segments.

Reprinted with permission from Accounting Today

If you’ve been perfecting your niche development, congratulate yourself, but don’t stop there. Kick things up another notch by considering “boutiquing”. A boutique is a specialty provider that offers a single category of services. It enjoys particular market appeal, including a marquee name, perception of quality and customized service.

As the Big Four concentrate energies and resources on Sarbanes-Oxley compliance, regional and local firms are finding there’s plenty of value and profit in honing their offerings in this way.

From Here to There

A niche is the result of a decision to concentrate in a particular market area, across either service lines or industries. Examples are: the construction industry, government audits, IT consulting or estate planning. The niche has the best opportunity of becoming a boutique offering when it is supported by:

  • a leader dedicated to developing it, managing it and devising ways to keep the offerings fresh
  • assigned revenue goals for the leader and team members
  • a compensation plan with incentives tied to performance
  • articulated market positioning and uniqueness
  • solid practice growth strategies and tactics, including a potent lead generation approach
  • a means of measuring progress, and
  • depending on the environment, a separate corporate structure.

 

Downs Is Up 

There have been a few pioneers in the burgeoning boutique business. Most recently is Pittsburgh’s Schneider Downs, which has taking “boutiquing” to a whole new level. The firm’s recent reorganization resulted in a collection of five LLCs under one corporate umbrella. They offer: accounting and tax; wealth management; corporate finance; technology advising; and a service suite which includes valuation, litigation support, planning and professional staffing.

The firm’s leaders anticipate the new structure will yield double-digit growth. The plan also includes branding at the boutique level, making it easier for clients to see and understand the value of boutique services offered. Holding company CEO Raymond Buehler Jr. told the Pittsburgh Business Journal, “Externally, as we brought more product and diversification to the practice, sometimes people would only work with us in one of the units and think that’s all we do.” Boutique level branding gives greater clarity to their repertoire of services.

Other Plusses

According to Buehler, making the leap from niche to boutique can also:

  • Expand leadership development opportunities, by closely tying results and compensation.
  • Extend your reach by bringing in non-CPAs as boutique leaders. This breaks down the artificial impediment that only CPAs can become partners, significant in light of the current CPA shortage.
  • Introduce fresh new perspectives.
  • Gain visibility for your firm as an innovator/thought leader.

Strategy Required

Creating a boutique firm requires a series of steps to formalize and energize your niches. One of the most important is revenue segmentation. Envision an Excel spread sheet. Revenue segmentation involves slicing your revenue by rows and columns – horizontally by service lines, in order to know what services make up what part of the total, and vertically by industry, to determine what each industry contributes.

Next, assign a leader’s name to each “chunk” of revenue. In this way you create a team of boutique leaders with ownership and accountability for each revenue segment. They assume responsibility for more than their individual book of business, assuming a solid stake in the firm’s overall success. As well, the process helps drive decisions such as resource allocation. By “slicing and dicing” your revenue, you can observe patterns, needs and opportunities. You’ll also observe more teamwork, as segment leaders become increasingly aware of the interrelationships between revenue segments. Motivating and focusing your team around revenue segments is the foundational step to assigning responsibility, evolving teamwork, and driving revenue.

Right Time

A mature marketplace with robust competition makes this an ideal time for boutique-building. Sarbanes-Oxley has created a new emphasis on what firms can and cannot do in a multi-provider market, a natural platform from which to consider this approach. Remember, slice and dice!

Gale Crosley

About Gale Crosley

Gale Crosley, CPA, has been awarded The Advisory Board Hall of Fame. She was selected one of the Most Recommended Consultants in the Inside Public Accounting BEST OF THE BEST Annual Survey of Firms for fifteen years, and one of the Top 100 Most Influential People in Accounting by AccountingToday for fourteen years. She is an honors accounting graduate from the University of Akron, Ohio, winner of the Simonetti Distinguished Business Alumni Award, and an Editorial Advisor for the Journal of Accountancy. Gale is founder and principal of Crosley+Company, providing revenue growth consulting and coaching to CPA firms. She brings more than 30 years of experience, featuring a unique combination as a practicing CPA in two national accounting firms, along with significant experience in business development in the cutting edge technology environment with such firms as IBM and MCI.

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